22 May 2025
This graphic was presented by the Special Investigating Unit to SCOPA on Tuesday. It is titled: Key players in the NLC corruption. Cropped from the graphic is this sentence: “Names have been mentioned because the cases they are involved in have already been made public — whether through civil litigation or disciplinary actions, involving suspensions.”
Out of 19 separate matters involving Lottery corruption that have been referred to the National Prosecuting Authority (NPA), only one is currently before a court, with no progress in getting the rest before the courts, Parliament was told on Tuesday.
Some of the charges, which include fraud, corruption and money laundering, date back to early 2022. This is according to two reports presented to MPs serving on Parliament’s Standing Committee on Public Accounts (SCOPA).
Senior Special Investigating Unit (SIU) officials presented a pared-down progress report with highlights of their investigation to the committee during a virtual meeting.
MPs were also given a more comprehensive 128-page version, which went into detail about what they had uncovered and named many of the people involved.
Among those named and referred to the NPA for prosecution are several former NLC executives and board members, who oversaw the NLC at a time when it was overwhelmed by corruption.
The list of names, headed “Key players in the lottery corruption”, is broken into two: “internal players” and “external players”, consisting of people the SIU has previously described as “kingpins”, and family and business associates.
The SIU identified four NLC executives and board members as key players in the looting. The SIU provided SCOPA with detailed information on Lottery corruption in which they were involved.
Members of SCOPA listened in silence as the SIU explained in detail how they were currently investigating R2-billion in fraud and corruption.
But they were told this amount could increase substantially as the SIU was continually receiving new information about further Lottery corruption, which would have to be investigated.
“This amount keeps increasing because we are currently receiving new tip-offs about corruption, as well as uncovering more and more during our investigations,” SIU chief operating officer Leonard Lekgethoa told MPs.
Gijimani Jim Skosana (ANC MP), after hearing the extent of the looting, said: “They were very relaxed, just like they were scooping ice cream.”
MKP MP Emerald Madlala asked the SIU how far it followed the flow of money. “I do not believe that such scale of corruption can happen without politicians being involved.”
So far, the Special Tribunal and the Asset Forfeiture Unit have successfully frozen properties, vehicles and pensions worth almost R122-million.
The SIU has completed two phases of its investigation, with phase one involving R280-million and R247-million in phase two. It has also delivered its first report on its findings to President Cyril Ramaphosa.
Phase three, which is expected to be completed by 31 December, so far involves R905-million. With new tip-offs coming in and investigations yet to begin, the SIU says that this will exceed the R2-billion “value of contracts under investigation with potential civil litigation” it previously estimated.
It has also referred Huma (an advocate), Ramulifho (an attorney who has been implicated in lottery corruption), and suspended NLC legal head Gugulethu Yako to the Legal Practice Council (LPC). Ramulifho is already in the midst of a disciplinary hearing at the LPC, following a GroundUp complaint against him.
The SIU has also referred seven people and 14 companies to the Companies and Intellectual Property Commission (CIPC), asking for them to be placed on a delinquency list and be barred from registering companies in the future.
The SIU laid out in detail how hundreds of millions in siphoned grants were used to buy houses and farms, cars and other assets. This, while multimillion-rand, lottery-funded projects like old age homes, drug rehabilitation centres, stadiums and sports facilities meant to benefit poor communities were abandoned unfinished because the money had been “chowed”.
“Sometimes someone applied for funding but was turned down. Then someone else will use the same application and resubmit it under their own names,” Lekgethoa said.
“Once they receive money, they might do some work on the funded project. Sometimes they’ll do nothing at all.”
In some instances, where people whose names had been used on applications, without them realising, discovered that funding had been allocated, they would complain to the NLC, he said. “They were then given other funding and told ‘leave this alone’”.
Organisations, particularly those funded for multimillion-rand infrastructure projects, would be told which companies to use. “These companies often belonged to officials at the NLC,” he said.
“Sometimes funds were channelled via trusts and then paid to [NLC officials] or their companies, and used to pay school fees or channelled via attorneys to buy properties. Sometimes people who got money were expected to pay 10 per cent, a tithe, to [a] church.”
Lekgethoa said the SIU was working closely with the new NLC administration and the level of cooperation they were receiving was “very good”.
The SIU found that the NLC’s systems were “not geared to detect abuse”, and the methods employed to loot funds included inadequate project management and auditing of projects, according to Lekgethoa. Other “root causes” were a “general maladministration” in the approval of the grants and the involvement of “corrupt elements.
The NLC’s computer systems were also unable to detect corruption, Mashudu Netshikwera, who heads up the SIU’s lottery corruption investigations team, told MPs. He was echoing NLC Commissioner Jodi Scholtz, who told GroundUp in 2023: “The system was enabled for corruption. It was as if people sat around a boardroom table and planned how to steal.”
One of the requirements for Lottery funding was that people or non-profits cannot apply for funding more than once in a 12-month period [there is a year cooling off period between grants], Netshikwera said. The NLC used two different systems to administer grant funding, “but they could not see each other”.
But, because the identity numbers of people were not captured, a single person could submit four or five applications and receive multiple grants over 12 months, he said.
“This has now changed and ID numbers are now captured,” he said. He said other safeguards had been added to a new online grants management system the NLC has implemented to combat fraud and corruption.
Proactive funding, where the NLC could allocate funding without requiring an application, was at the heart of the looting. It was suspended in 2023, soon after a new board was appointed. It was intended for dire circumstances, like drought relief or natural disasters, but was instead abused to allocate tens of millions of rands to projects. Often, money was allocated for big infrastructure projects, like this one in Limpopo which was abandoned, despite being allocated R26-million.
“Proactive projects would be initiated by board members or executives, which had already been approved. The project would be sent to the distributing agencies [which assess applications], just for payment approval without doing any adjudication.” Payment of millions of rands for these projects was often done within days, Netshikwera said.
Companies were also set up for the specific purpose of looting Lottery funds, Netshikwera said. Often, when the SIU investigated dodgy grants and followed the money using bank statements, it found a series of interlinked companies that would then also need to be probed.
“The reason why our investigations take so long is because of the layering of the money laundering to hide the source of money. It can also take up to two to four weeks to get a single bank statement. But we are committed to tracking down every cent,” he said.
“Ninety-eight per cent of the [suspect] non-profit organisations and companies that we looked at were opened just to get money from the NLC. Trusts were also formed by the looters as a way to launder lottery funds, he said.
In most cases, at least “60 to 70%” of the allocated funds were looted. While in some instances, like this sports centre in Soweto, the funds were looted without anything being built.
Accounting firms and auditors also played a role in the looting by producing fraudulent financial statements for organisations unable to meet the NLC requirement of two years of financials to be eligible for funding. The reason was that these organisations were dormant and had been hijacked, or they were companies bought off the shelf and had no track record as they had not yet traded.
The NLC has applied for its 2020 Presidential Proclamation mandate to be extended so it can investigate corruption beyond the period covered by the original proclamation. It has also asked for the proclamation to include procurement, as the 2020 proclamation only allows it to investigate grant fraud and corruption.
This has left the SIU hamstrung when investigating fraud and corruption involving the NLC’s procurement of services and appointment of service providers, which ran to hundreds of millions of rand.
In February this year, Justice Department spokesperson Kgalalelo Masibi confirmed that a submission was “being prepared” for the Minister of Justice to authorise the amendment to the proclamation. “A decision can be expected by the end of February 2025,” Masibi told GroundUp at the time.
But, three months later, nothing has happened, and a recent request by GroundUp for an update on the proclamation was ignored by Masibi.
Responding to a question from Action SA MP Alan Beesley, Netshikwera said that the application had been submitted in April last year. The department had asked for more information in February, and a decision was expected “soon”.